Siddharth Menon, co-founder and COO of WazirX, one of the world’s largest cryptocurrency marketplaces and…
650 U.S. banks start offering Bitcoin trading to its customers
A new deal with NCR and NYDIG has paved the way for U.S. banks to offer Bitcoin products and services to their customers. The deal enables community banks including North Carolina-based First Citizens Bank and credit unions including Bay Federal Credit Union in California to all offer their customers crypto trading. NYDIG would provide the mobile applications by which the trading can take place.
The deal includes roughly 650 banks and will offer crypto services to over 24 million customers. In terms of Bitcoin adoption this can be seen as a huge step forward.
Following the deal, banks can offer bitcoin trading options without having to worry about regulations surrounding bitcoin ownership. The bank’s customers can trade bitcoin without the banks themselves having to hold any coins. They will be held on the app provided by the payments provider.
The banks would not hold any coins for their customers. Instead, the coins will be held on the apps built by the payments provider.
(Retail) customers and larger investors have long wanted to get in on crypto and have started demanding their banking partners for access. A good example is Goldman Sachs that reopened its crypto trading desk earlier this year.
Due to red tape and regulatory issues, U.S. banks currently cannot buy crypto assets. This leads the banks to increasingly finding new ways to offer their customers what they want. Without the need for banks to buy or even hold any crypto, NYDIG offers a way to circumvent regulation.
It was in May this year that NYDIG already announced that hundreds of U.S. banks would soon be bringing crypto products and services to its clients.
For this ‘project’, NYDIG, a subsidiary of $10 billion New York-based asset manager Stone Ridge, has partnered with fintech giant Fidelity National Information Services. Together they have developed a program to enable U.S. banks to offer bitcoin this year.
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Author: Peter Siu